EXHIBIT 99.1
FOR
[First Federal Bancshares of Arkansas, Inc. Letterhead] IMMEDIATE
RELEASE
1401 Highway 62/65 North FOR FURTHER INFORMATION CONTACT:
P. O. Box 550 Larry J. Brandt/President-CEO
Harrison, AR 72602 Tommy Richardson/EVP-COO
Sherri Billings/EVP-CFO
870-741-7641
FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
ANNOUNCES EARNINGS
Harrison, Arkansas - April 27, 2005 - (NASDAQ NMS:FFBH) First
Federal Bancshares of Arkansas, Inc. (the "Corporation"), a
unitary savings and loan holding company for First Federal Bank
of Arkansas, FA (the "Bank") announced today that the
Corporation's net income amounted to $1,964,000 or $0.39 basic
earnings per share and $0.37 diluted earnings per share during
the first quarter of 2005 compared to net income of $1,760,000 or
$0.34 basic earnings per share and $0.32 diluted earnings per
share during the first quarter of 2004. Book value or
stockholders' equity per share, at March 31, 2005, was $14.86.
Larry J. Brandt, President/CEO for the Corporation said, "I am
pleased to report net income of $2.0 million and diluted earnings
per share of $0.37 for the quarter ended March 31, 2005, which is
a 12% and 16% increase, respectively, compared to the same
quarter in 2004. We continued to enhance shareholder value this
quarter by increasing our cash dividend to $0.12 per share, a 9%
increase compared to $0.11 per share for the previous quarter and
a 20% increase compared to $0.10 per share for the same quarter
in 2004. We continued to be successful in growing our loan
portfolio during the quarter, as evidenced by the increase of
approximately $32 million in net loans receivable, which
represents an annualized increase of 20%. Growth continues to be
strong in our market area of North Arkansas where we continue to
expand our franchise. We anticipate completion and opening of
our third office in Mountain Home by the end of the second
quarter and completion of the Yellville office expansion by the
end of May. We also held the groundbreaking ceremony this week
for our fifth office in Washington County on Highway 412 in
Springdale. In addition, we have plans for future offices in
Centerton, Lowell and the Pinnacle Hills area of Rogers."
Total assets at March 31, 2005 amounted to $782.0 million, total
liabilities were $706.5 million and stockholders' equity totaled
$75.6 million or 9.7% of total assets. This compares with total
assets of $751.7 million, total liabilities of $676.4 million and
stockholders' equity of $75.3 million or 10.0% of total assets at
December 31, 2004. At March 31, 2005 compared to December 31,
2004, cash and
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cash equivalents decreased $2.9 million or 18.2%, investment
securities held to maturity decreased $1.2 million or 2.1% and
net loans receivable increased $31.9 million or 5.0%. The $30.1
million or 4.5% increase in total liabilities was primarily due to
an increase of $6.3 million or 1.1% in deposits and an increase in
Federal Home Loan Bank ("FHLB") of Dallas advances of $24.1 million
or 26.9%. Cash and cash equivalents, funds available from the
proceeds of matured or called investment securities held to maturity,
and the increases in deposits and FHLB advances were used to fund
loan growth. Stockholders' equity increased during the three month
period ended March 31, 2005, due to net income in the amount of $2.0
million resulting from continued profitable operations, as well as
the issuance of 126,388 shares of treasury stock totaling $1.2
million as a result of the exercise of stock options. Such
increase was partially offset by the purchase of 136,000 shares
of treasury stock totaling $3.3 million in connection with the
Corporation's stock repurchase program and, to a lesser extent,
the payment of quarterly cash dividends in the amount of
$610,000.
Non-performing assets, consisting of certain classified loans and
repossessed assets, amounted to $8.8 million or 1.13% of total
assets at March 31, 2005, compared to $8.5 million or 1.13% of
total assets at December 31, 2004. The allowance for loan losses
amounted to $2.0 million at March 31, 2005 or 0.26% of total
loans and $1.8 million at December 31, 2004 or 0.26% of total
loans.
Net interest income, the primary component of net income,
increased from $5.9 million for the three months ended March 31,
2004 to $6.5 million for the comparable period in 2005. Net
interest margin for both the three months ended March 31, 2005
and March 31, 2004 was 3.61%.
Noninterest income increased $138,000 or 9.6% to $1.6 million for
the three month period ended March 31, 2005 compared to $1.4
million for the three months ended March 31, 2004 primarily due
to an increase in deposit fee income.
Noninterest expenses increased $422,000 or 9.4% between the 2004
and 2005 three month periods ended March 31. Such increase was
primarily due to an increase in salaries and employee benefits
and advertising and public relations expense.
First Federal Bank is a community bank serving consumers and
businesses with a full range of checking, savings, investment and
loan products and services. The Bank, in its 71st year, conducts
business from 15 full-service branch locations, one stand-alone
loan production office, and 24 ATMs located in Northcentral and
Northwest Arkansas. For information on all the products and
services we offer, visit us at www.ffbh.com or contact our
Account Information Center at (870) 365-8329 or (866) AIC-FFBH
toll free or by email at aic@ffbh.com.
Financial Tables Attached
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FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands of dollars)
(Unaudited)
March 31, December 31,
ASSETS 2005 2004
--------- ------------
Cash and cash equivalents $13,097 $16,003
Investment securities held to maturity 55,445 56,660
Federal Home Loan Bank stock 5,958 4,876
Loans receivable, net of allowances 666,140 634,217
Accrued interest receivable 5,074 4,427
Real estate acquired in settlement of loans, net 458 563
Office properties and equipment, net 16,011 15,295
Cash surrender value of life insurance 18,094 17,897
Prepaid expenses and other assets 1,756 1,727
------- -------
TOTAL ASSETS $782,033 $751,665
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES:
Deposits $588,758 $582,424
Federal Home Loan Bank advances 113,889 89,756
Advance payments by borrowers for taxes and insurance 938 757
Other liabilities 2,880 3,427
------- -------
Total liabilities 706,465 676,364
TOTAL STOCKHOLDERS' EQUITY 75,568 75,301
------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $782,033 $751,665
======= =======
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FIRST FEDERAL BANCSHARES OF ARKANSAS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
AND RELATED SELECTED OPERATING DATA
(In thousands of dollars, except earnings per share)
(Unaudited)
Three Months Ended March 31,
----------------------------
2005 2004
-------- --------
Interest income $ 10,595 $ 9,380
Interest expense 4,127 3,506
-------- --------
Net interest income 6,468 5,874
Provision for loan losses 249 259
-------- --------
Net interest income after
provision for loan losses 6,219 5,615
Noninterest income 1,570 1,432
Noninterest expenses 4,896 4,474
-------- --------
Income before income taxes 2,893 2,573
Income tax provision 929 813
-------- --------
Net income $ 1,964 $ 1,760
======== ========
Earnings Per Share:
Basic $ 0.39 $ 0.34
======== ========
Diluted $ 0.37 $ 0.32
======== ========
Selected Operating Data (Quarter Annualized):
- --------------------------------------------
Interest rate spread 3.51% 3.50%
Net interest margin 3.61% 3.61%
Return on average assets 1.02% 1.01%
Noninterest expenses to average assets 2.55% 2.57%
Return on average equity 10.41% 9.33%
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